SEKISUI CHEMICAL believes that enhancing business transparency and fairness and speeding up management decision-making is essential to sustaining steady growth in corporate value. The Company is strengthening the Business Execution function, the Supervisory function, and the Audit System continuously.
Corporate Governance Basic Policies and Systems
SEKISUI CHEMICAL Group sets forth as the basic policy for corporate governance the promotion of sustainable corporate growth and the increase of corporate value. To realize this, the Group will enhance the transparency/fairness of management, pursue prompt decision-making, and continue to fulfill the expectations of “customers,” “shareholders,” “employees,” “business partners,” and “local communities and the environment,” the five major categories of stakeholders that the Company values most, through the creation of values to the society.
Strengthening the Board of Directors
The Board of Directors comprises ten Directors, and it continually strives to strengthen its role as a body responsible for decision-making concerning the Company’s fundamental policies and upper-level management issues, and supervising the execution of business. The Board includes independent Outside Directors to ensure transparency in management and fairness in business decisions and operations.
The Company appoints to the Board two Outside Directors with verified independence from the Company who contribute to the enhancement of corporate value by providing advice and oversight based on their extensive administrative experience and specialized knowledge. The Outside Directors provide counsel based on their diverse and objective perspectives on priority management issues, such as global development strategy, business model revisions, and strengthening of CSR management.
Kunio Ishizuka, Outside Director
Mr. Ishizuka is Senior Corporate Advisor of both Isetan Mitsukoshi Holdings Limited and Isetan Mitsukoshi Ltd. His guidance based on his knowledge and experience as a management executive of a leading retail and service company is expected to fortify the corporate governance of the Company.
Yutaka Kase, Outside Director
Mr. Kase is Senior Corporate Advisor of Sojitz Corporation. His guidance based on his abundant knowledge and experience as a management executive of a general trading company is expected to promote the globalization of the Company.
Nomination and Remuneration Advisory Committee
The Company has established an optional advisory committee concerning nomination and remuneration to further enhance fairness and transparency of management.
The Nomination and Remuneration Advisory Committee deliberates matters related to the selection of Directors, matters related to the remuneration of Directors, and matters related to enhancing the effectiveness of the Board of Directors, etc., and submits recommendations and advice to the Board of Directors. The Nomination and Remuneration Advisory Committee comprises five members who have been selected by the Board of Directors from among Directors and Kansayaku, the majority of whom are independent outside board members. The Chairperson is elected from the independent outside board members.
Strengthened Business Execution Functions
Under our division company system, we introduced a Executive Officer System, to separate supervisory (Directors) and business execution (Executive Officers) functions, with the aim of enhancing each divisional company’s ability to respond swiftly to changing business conditions.
Executive Officer System
The Executive Officer System appoints Executive Officers whose role is to focus solely on business execution and to respond swiftly to business opportunities. Each divisional company has an Executive Officers Committee, which serves as the company’s highest decision-making body. The Executive Officers Committee has been delegated substantial authority previously entrusted to the Board of Directors.
Executive Officers are appointed by a resolution of the Board of Directors, and their term of office is one year.
The Company has strengthened its auditing system, designed to harmonize the efforts of corporate Audit & Supervisory Board Members and internal audits, ensure the appropriate functioning of the management and operations oversight system.
Audit & Supervisory Board comprises five Audit & Supervisory Board Members (including three outside Audit & Supervisory Board Members with verified independence from the Company) who undertake extensive audits, which cover the execution of duties by the Board of Directors, and the conduct of business by all divisional companies, and corporate headquarters.
Reinforcement of the Internal Control System
In May 2006, the Board of Directors resolved to adopt a fundamental policy regarding the establishment of an internal control system for ensuring the appropriateness of the Group’s business activities.
Based on the Corporate Activity Guidelines set forth in accordance with the Group management principles, the Company seeks to realize collaborative interaction concerning the supervision, directives, and communications of the SEKISUI CHEMICAL Group (the Company and its subsidiaries), and SEKISUI CHEMICAL’s duties include providing guidance and counsel, and undertaking evaluations of all SEKIAUI CHEMICAL Group members to ensure that their business activities are being conducted in an appropriate manner.
To further strengthen the Group’s compliance activities, the CSR Committee, chaired by the president, deliberates the Fundamental Compliance Policies, which are subject to approval by the Board of Directors. In addition, the Compliance Sub-committee supervises compliance activities group wide, and conducts activities to highlight the importance of compliance as a fundamental aspect of our corporate culture.
Reinforcement of the Risk Management Structure
SEKISUI CHEMICAL maintains a company wide risk management structure for integrated management of measures to prevent risk events from occurring (risk management) and to respond with risk events occur (crisis management). The Risk Management Group of the Human Resources Department maintains and refines the risk management structure and disseminates information to all directors, executive officers, and employees of the Company and the Group companies.
In fiscal 2017, some 170 task forces are working to reduce and eliminate risk by analyzing and assessing conditions and implementing risk management measures followed by periodic reviews and implementation of the PDCA cycle of risk management for ongoing improvement. The Risk Management Group addresses risk expediently and systematically, reports to each subcommittee of the CSR Committee, and considers measures for implementation throughout the Company.
Crisis management activities are carried out following the SEKISUI CHEMICAL Group Crisis Management Guidelines. Risk management officers of each department regularly hold crisis management liaison meetings to research incidents and reinforce practices.
The Company’s overseas crisis management activities are overseen by the Global Crisis Management Office and Regional Crisis Management Responsibility in each of the Company’s nine regions in line with the SEKISUI CHEMICAL Group Global Crisis Management Guidelines.
Information Disclosure and Communication with Stakeholders
In order to deepen mutual trust with all of our shareholders, we believe it is important not only to actively disclose information in a timely and appropriate manner, but also to enhance two-way communications with our shareholders. To steadily put this belief into practice throughout the Group, we established the “Principle of Corporate Information Disclosure” in December 2005 and simultaneously, beefed up our internal information disclosure framework. For instance, we have set up the “Corporate Information Disclosure Regulations” which specify the content and system of disclosure. In order to pursue this principle further, that is to actively disclose more information, since fiscal year 2006 we have been holding meetings with the staff who are responsible for information disclosure at the respective divisions.
In SEKISUI CHEMICAL Group, the Investor Relations Group within the Business Strategy Department is working hard to strengthen two-way communications with our shareholders and investors, not only by disclosing financial statements in a timely and appropriate manner but also by actively reflecting our shareholders’ voice in our management. For example, we hold quarterly briefings on financial results where our management explains these figures. Also, we pay heed to the voice of capital markets by holding one-on-one meetings with analysts and investors.
To ensure information is provided in a fair manner, the Group posts its financial statements and results briefings on the Company website in Japanese and English simultaneously and additionally provides audio recordings of the briefing and a transcript of the question and answer session.